Credit Karma's CEO Built a Sexy Brand in an Unsexy Category with No PR Firm and a Tiny Budget — Here's How

Kenneth Lin was skimming through Reddit — an unremarkable daily habit — when he discovered something that changed his life for good: His company, Credit Karma, had finally broken into the mainstream. There it was: A thread about credit monitoring kicked off by a user suspicious that his company’s free credit check service was a scam — including a passionate response from a user defending and extolling Credit Karma. “Oh my god,” Lin thought. “That person doesn’t even work for us.” It was a purely organic moment — foreshadowing the word-of-mouth trend that would win the startup millions of users in the months to come.

Ten years later, Credit Karma has established market dominance, with more than 50% of all customers hearing about the site from other users. It’s Googled more than Geico — considered the standard bearer for companies that have managed to build sexy, personality-driven brands in patently unsexy industries. Which makes it all the more surprising that Credit Karma pulled this off with a staff 1% the size of Geico’s, a paltry budget, and no PR agency help in those early, critical, brand-establishing years.

At First Round, we get asked all the time how companies can capture mindshare and customer fascination when they have hardly any resources to throw at it. Well, Lin’s company did exactly that to create a company now worth over $3 billion, and he broke down how for the audience at our last CEO Summit. In this piece, we share his answers with you.

Three Early-Days Exercises

Ironically, Lin had never thought branding was very important. “To me, it was this nebulous thing big companies spent money on without any accountability or metrics — it didn’t seem to make sense for us at the beginning.” So when it came to getting the Credit Karma name and its message out there, they bootstrapped their own process. Along the way, they discovered three lessons they wish they’d had from the start:

1. Survey your founding team to find out who you are, not who you want to be.

The first thing Lin and his early employees did was list adjectives to distinguish Credit Karma in the market. But what they ended up with — helpful, honest and pragmatic — didn’t resonate with people. They realized they were talking about the company they aspired to create, not the one actually in front of them. “Even if you say, ‘Our company is this, this and this, it won’t magically become that,” says Lin. “It’s much more powerful to start with your team’s honest beliefs and experience.” You’ll end up in a much more creative and unique place.

Get there by asking your employees these questions:

What personality traits do we all share?

What words describe how we interact with each other?

What beliefs are keeping us here, working on this idea?

Aggregate responses and find commonalities. Then push back. Are the most frequent answers accurate? Do the words people write down describe the company at large?

“We ended up with a completely different list of words than we thought we wanted,” Lin says. “What you want to be and what you actually are are very rarely the same thing. We ended up rallying around ‘fairness,’ ‘humility,’ ‘helpful,’ ‘relationship-driven,’ ‘integrity.’” In short, they weren’t flashy and didn’t lend themselves well to salespeak. But they were more honest — adding up to a more trustworthy brand.

A brand is not something you can craft out of thin air. It has to reflect reality.

2. Don’t copy the brands you love — use them to position your company more precisely.

Seizing on the elements you really love about other brands can quickly lead you astray. Everyone in Credit Karma’s early team was enamored with Apple, and its obsession with perfection in particular. “We thought of course we should be like them,” Lin says. “But perfection works for Apple in a way that made no sense for us. We’re a company that always needs to be moving the ball forward rather than getting every single detail right. We need to be more accessible than Apple, and we have customers that expect us to always be iterating and improving.”

If I have one piece of advice for someone just embarking on branding, it’s to not strain yourself trying to mimic other companies you think are ideal.

Instead, use these other brands as foils to decide what makes sense to emphasize about your company, and what doesn’t. Maybe you want to convey Apple’s same emphasis on clean UX, but you need to iterate more. Maybe you love Amazon and want to project the same image of convenience, but your approach to customer service is different.

Create three columns on a piece of paper. In the first, put the name of a brand you admire. In the second, write the adjectives that you want to borrow from them. In the third, place the attributes you don’t want to embody. By running this exercise, you can use your favorite brands to more precisely position your own company without mistakenly following in anyone else’s footsteps.

3. Put your branding “don’ts” upstream of your other priorities.

“Too often, talking about brand is punted in favor of tasks perceived to be more important like design and manufacturing,” says Lin. “This is misguided because your brand should inform every decision you end up making to set up your company. Knowing your brand will make sure you remain true to yourself as you navigate these other choices, make hires, build teams, grow.”

Run exercises 1 and 2 listed above as early as you possibly can before you make other critical decisions. At the same time, make a concrete list of the choices you will never make at risk of compromising, changing or betraying what it is you stand for. These convictions will become your guardrails. “Write them down and never cross them,” says Lin.

For instance, one of Credit Karma’s taboos was charging customers for their credit information. Doing so would fundamentally change the company’s thesis, depart entirely from what they set out to do, and break a key promise to their market. All decisions made in the last ten years of its history have adhered to this central ‘don’t,’ and their growth, partnerships and marketing have all revolved around it — despite critics’ insistence that the model was unsustainable. If you don’t clearly assert what it is you will not do, you’ll always be at risk of doing it eventually. Install guardrails that will keep you from temptation.

The Habits of ‘Courageous Branding’

When Credit Karma launched in 2008, credit score companies weren’t just unsexy — they were loathed. Too many of them falsely promised free reports only to spam people who signed up. To break through this noise and differentiate themselves, Lin’s team had to venture far from their comfort zone in their brand messages and behaviors. These actions, taken together, defined a branding strategy that took serious guts.

Pick where to prioritize brand over revenue.

Even when people love your brand, they won’t engage with it or refer their friends unless you make it easy for them. This requires building features to drive positive engagement, which can be a tough sell when you’re just starting out. “It can seem counterintuitive that features that don’t generate revenue could be your greatest competitive advantage later on,” says Lin. “But we built credit simulators and tools to dispute credit report errors even if it didn’t bring in money because we wanted to drive habitual engagement with the site.

“This is one of the key reasons searches for Credit Karma eventually outpaced Geico and its billion-dollar annual ad budget,” he says. “When we started, we had zero searches. And it didn’t change overnight. It took us five years to dispel the baggage that came with our business model. We had to invest in tools explicitly to turn this around.” The lesson: your brand is like the foundation of a house. You want to get it exactly right before building on top of it, even if it takes resources away from revenue initially.

Volunteer for trial by fire.

During Credit Karma’s early years, Lin spent hours in credit-related forums conversing with people to clarify what the service was and wasn’t. “I would respond to 50 posts every night in addition to emailing 20 bloggers writing about us or the space,” he says. “Any PR person would have probably told me this was a terrible idea. People tend to be very cynical and pull out all of your flaws. But it was beneficial for us because it gave me a live pulse on how we were being perceived in the industry. It also allowed me to respond to and debunk the specific criticism surrounding our brand. It’s better to face the music than hide from it. Confront negative feedback and engage directly with those giving it as a human being, not as your company.”

The lesson: As a CEO, founder, or early leader, take the time to interact with users directly, no matter what their experience is. Don’t let customer service queries and complaints go unanswered. Don’t send canned responses. Set aside regular, uninterruptible time to write back, follow up, and find thoughtful responses to people’s concerns. Most of the time, they’ll be so surprised to hear from you, that personal touch will find its way into conversation with their friends and colleagues. It will make a surprising difference for your reputation.

Create metrics and benchmarks for customer or user ‘delight.’

A lot of startups strive to be data-driven in their decision making these days. But this can mean measuring lots of different things — engagement, conversions, and revenue are typical. It’s not as common to regularly collect, review and — most importantly — respond to data around customer delight.

You want to implement metrics that actively measure whether new features are positively influencing the user experience.

Net Promoter Score (NPS) is a clear choice here, worth using to make decisions and chart your roadmap, says Lin.

“Studies show that in any given category, the company with the highest NPS score grows two times faster than the industry average,” he says. “When you think about it that way, you realize brand is not something you can leave up to chance. It’s something you have to put quantitative tabs on to make sure you’re on the right track. Pay attention to NPS and it will not only grow your loyalty, but also your word-of-mouth marketing, which is beyond valuable. Today, over 65% of all Credit Karma users come to the site based on a word-of-mouth referral.”

Other metrics that reflect delight: percentage of returning users, how often they return, how often they choose to share your content through social media or email, and whether they engage with any built-in referral tools. You want these numbers heading up and to the right. Don’t overlook them, even if your board seems to be interested in other signs of growth.

Track down and reward your champions.

There’s a category of users you want to endear yourself to over time — you’ll know them because of their high NPS scores, their engagement with sharing and referral tools, and their penchant to write glowingly about you on forums and in blog comments. They’re people who will tell many others about your product without you even asking. It’s worth the effort to look for them and make contact when you do. “Your super promoters drive irreplaceable value for your business,” says Lin. “They buy more, go out of their way to provide feedback, stay longer, and refer their friends. Deepen their loyalty by bringing them into your community.”

For example, Credit Karma tracked Reddit users who would come to their defense in comment sections. They reached out and asked them what more they wanted to see from the service. The feedback they got was that people were frustrated with inaccuracies in their credit reports. Fixing these issues was tedious and costly. They listened and deployed Direct Dispute in response, which allowed consumers to challenge inaccuracies in their reports with just a few clicks.

Remember that your super promoters are not one size fits all. “An offer for $25 savings may make a big difference to some consumers and not at all for others,” says Lin. “You’ll hurt your relationships if you send too many emails that are not relevant to the audience. Customizing offers and letting people opt out easily are vital to retention.” He recommends closely watching unsubscribes from communications with your super promoters in particular. “It’s the clearest signal of whether you’re creating tangible value for that person.” Credit Karma runs up to 15 A/B tests a week to understand the behavior of these customers and tailor their service accordingly.

Part of being courageous is having champions behind you. Don’t get caught taking them for granted. You need people to stick with you as you place big bets.

Once you define what you stand for, stick to it. It takes grit to redefine an industry.

Running the Reddit Test

As you can tell, Lin is a big fan of Reddit — even though it’s home to many of Credit Karma’s loudest critics. In fact, that’s what he likes about it: It’s a valuable tool to see if the company’s arguments will fly or die, what messaging works best, and how they can convert skeptics.

If you’re building a consumer product, you’re likely to find current or prospective users on Reddit. You're also bound to find a surprising number of people passionate about any topic — even if it's obscure. They’ll be pretty diverse, ranging from informed to supportive to clueless to hostile. And they’re poised to be vocal and candid — that’s what the site is known for, after all. Exposing your business model and marketing language to this audience can therefore be an extremely educational litmus test, says Lin.

Will what you’re saying pass muster with people who have no incentive to hold back? It’s a way to get a rare moment of truth.

In particular, Redditors tend to pick up on companies that have strayed from their values, or compromised on the don’ts they may have set forth for themselves. It seems to be a particular talent among that crowd, Lin says. Points are awarded for clarity and sincerity. “If people accept your responses to their complaints and pointed questions, it’s a good indicator that you’re being sufficiently genuine and transparent.” Once you’ve workshopped language on Reddit, you can take what you’ve learned and apply it to your broader audience.

Credit Karma’s most important (and common) Reddit test focused on the company’s most-asked question: Is it really free? Essentially, what’s the catch? To refine how they were talking about their model and maximize incoming feedback, Lin decided to host an AMA (Ask Me Anything) thread on Reddit in 2014. Under the username CredditKarma, he proved his identity and braced himself. Immediately, he was hit with the question: “Isn’t this a scam?”

“I thought, ‘If we can survive opening the floodgates on Reddit, that will confirm that we’re being self-aware enough and communicating this super important idea clearly,’” he says. “I thanked the user for asking the question and, as directly as I could, explained the business model. I stressed that we never sell user information and how we were opposed to scammy tactics. I made a point of not being defensive or hiding anything.” His response became the most upvoted comment in the thread, immediately visible to users clicking into the thread or searching for Credit Karma. “No one yelled, ‘That’s bullshit!’ It was the big vote of confidence in the values we built the brand around.”

Lin recommends that other entrepreneurs check out Reddit conversations about either their products or the category they’re building in. What are people saying about similar companies or competitors? How might you respond to those questions or complaints? Find entry points into related conversations in relevant subreddits and present yourself as a transparent source of information. It’s very rare that this audience gets to interface directly with a founder or CEO. Consider starting a thread yourself to ask pivotal brand question you’ve been stuck on. There are very few sandboxes where candor is a prized attribute — where you can get honest feedback while winning loyal fans at the same time.

Reddit isn’t the only place this is possible. Product forums are also great sources of educated and honest commenters who care enough to tell you what they think without holding back. They’ve seen enough to call bullshit, but appreciate well-built products messaged honestly. When you’re running a startup, focus groups might not be feasible. Running your brand strategy by these people who love rendering opinions for free is a low lift way to see where you need to make alterations before deploying it for the rest of your customer base.

On top of that, frequenters of niche product forums and subreddits are often so excited about the products they’re discussing for free, that you can learn from their enthusiasm. If you’re building a company in a less engaging market, creating an exciting brand around it can seem daunting. Look at the words and adjectives used by people who are genuinely jazzed about these topics. What features or offerings light them up? How do they describe them to each other? Take notes on the lexicon they use about what you’re doing. They might come in handy when you’re explaining why your broader consumer base should be pumped as well.

What It Means for a Brand to Be Sexy

Despite all we’ve written about branding on First Round Review, we still hear from companies that believe they can’t build a compelling brand around what they’re doing — it’s too niche, too technical, too wonky, too boring to communicate, they say. If anyone can prove them wrong, it’s Lin. It just takes a different approach. And it’s more than worth it, because brand should dictate a bunch of actions you take downstream, from how you interact with customers to how you determine which features to build next.

A brand is sexy if it attracts attention from your specific audience. That’s all. It doesn’t have to set the world on fire, just a subset of it. So don’t copy others, or feel like you need all the same bells and whistles of other brands. Find your unique voice that cuts through the noise for your customers by channeling the personalities on your founding team, and being honest among the people who are poised to care about your company most. Listen to what they talk about and the questions they raise. Make yourself vulnerable to criticism even if it’s the last thing you feel like doing. And don’t disqualify yourself early by thinking brand will never be a strength for you.

“Brand is not just what you show to the rest of the world. It’s the living soul of your company,” says Lin. “It’s the way you can constantly iterate and measure what’s valuable for every one of your customers. Depending on the size of your company, there may be hundreds or thousands of conversations happening about your company every day.”

How your customers talk about you when they don't think anyone is watching is an underused measure of how strong your brand is.

“When that Reddit user clarified Credit Karma’s mission, it was so meaningful to see someone take the time to correct another user and provide supporting research,” he says. “That’s why a great brand is critical to building your business. It creates a band of followers who always have your back.”

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